Iran would cut oil exports if sanctions intensify

Iran warned Tuesday it would put a lid on oil exports should sanctions imposed by Western nations get any tighter.

“If sanctions intensify, we will stop exporting oil,” Iranian Oil Minister Rostam Qasemi told Reuters, adding that Tehran has a “plan B” if sanctions keep a heavy hand on the industry. “We have prepared a plan to run the country without any oil revenues,” Qasemi said.

Western nations, led by the US, laid down more pressure on Iran’s oil industry over its nuclear program, which is believed by outsiders to be used to produce nuclear arsenal. The sanctions aims to choke out oil revenues and pressure Tehran to abandon its ambitions, which it claim is for “peaceful” civilian and scientific purposes.

Tehran has threatened to cut off oil exports and warned that it would block a vital shipping lane to oil trade. “If you continue to add to the sanctions we will cut our oil exports to the world … We are hopeful that this doesn’t happen, because citizens will suffer. We don’t want to see European and US citizens suffer,” Qasemi said, adding that loss of Iranian oil in the market could lead to soaring oil prices.

Analysts, however, brushed off Iran’s threat. “Iran needs to export its crude more than other countries need to import it. They are desperate for cash,” said Leo Drollas, Chief Economist at the Centre for Global Energy Studies.

US officials said the sanctions were “crippling” Iran’s oil exports, plunging 40-50% to 1 million barrels per day this year from 2.2 million in 2011. Iran rejected the report on Tuesday, claiming it was still producing 4 million barrels per day.